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Paragon Fine And Speciality Chemicals IPO entails to raise Rs 51.66 crores. The issue is entirely a fresh issue of 51.66 lakh shares. Paragon Fine and Speciality Chemicals, a specialty manufacturer servicing the pharmaceutical and medical devices sectors,

About Paragon Fine And Speciality Chemicals Limited;

• Paragon Fine And Speciality Chemicals Limited is engaged in the business of custom synthesis and manufacturing of chemical intermediates involving complex and differentiated chemistry.
• The Company commenced business as a partnership firm in the year 2003 and have, over the years, evolved into custom synthesis and manufacturing of Pharma Intermediates, Agro intermediates, Cosmetics Intermediates, Pigment Intermediates and Dye Intermediates etc.
• The company’s manufacturing facility, of 7000 square metres with top-of-the-line reactors for conducting research in order to produce new goods, is situated in the Viramgam, Gujarat.
• As of March 31, 2023, their product portfolio comprised around 140 products which were marketed to over 13 global customers spread in 12 countries and to around 75 domestic customers.
• As of June 30, 2023, it had 61 employees (including 5 contractual workers) on its payroll. For R&D it had a team of 14 technocrats.
• Promoters: Dr. Pravinchandra Jasmat Vasolia, Vallabh Ratanji Savaliya, Kishorkumar Panchabhai Patolia, Rutesh Vallabhbhai Savalia and Shivam Kishorbhai Patolia.

Financials: Paragon Fine And Speciality Chemicals Limited

Anchor: Paragon Fine And Specialty Chemicals IPO

Paragon Fine And Speciality Chemicals IPO: Salient Points

• Promoter holding will come down from 100% to 64.77% after the IPO.
• Company is focused on manufacturing speciality chemical intermediates involving complex and differentiated chemistry and technology. Their products have applications across a wide spectrum of industry including pharma, agrochemicals, cosmetics, pigments and dyes.
• As of March 31, 2023 product portfolio comprised around 140 products which were marketed to over 13 global customers spread in 12 countries and to around 75 domestic customers
• They use various chemistry compositions like: Acetylation, Amination, Catalytic hydrogenation, Chlorosulfonation, Methoxylation, Nitration, Amidation, Ethoxylation, Sulphonation etc which enables us to cater to niche and advanced intermediate requirements of a wider range of end-products and applications.
• During the stub period ending June 30, 2023, Fiscal 2023, Fiscal 2022 and Fiscal 2021, our revenues from our exports amounted to 1,031.47 ₹ 3,464.02 lakhs, ₹ 4,470.74 lakhs and ₹ 5,213.82 respectively, which constituted 35.83% 33.87%, 53.98% and 62.62% respectively, of our total revenues from operations.
• Issue proceeds will be used for:

•  Key Performance Indicators

• Split of revenue from operations

• Company has been investing in developing new products such Food Grade Folic Acid, which is a nutrient supplement for human and animal consumption. This product is in the stage of R&D and commercialization of the same is pending.
• They are also developing the product HALQUINOL which is a veterinary antibiotic and feed additive used to promote animal health and growth. It’s commonly employed in livestock and poultry farming to prevent and treat various bacterial infections and improve feed efficiency. They have initiated commercial trials/ sample tests of the said product under development.
• Management also indicated that development of chemicals used in Electronics and EV industry is at R&D Stage.
• Company is going for Backwards integration.
• Company has availed term loans from Yes Bank Limited.
• As per the RHP, Paragon Fine IPO listed peers are Aether Industries Ltd (P/E of 89.6x), Anupam Rasayan India Ltd (P/E of 51.0), Bodal Chemicals Limited (P/E of 42.4), and Deepak Nitrite Ltd (P/E of 35.18). 
• Paragon Fine And Specialty Chemicals IPO is coming at a PE ratio of 19.8x(fy23 earnings) and 13.5x (fy24 annualized earnings)
• I intend to apply in Paragon Fine And Speciality Chemicals IPO subject to availability of funds.
• GMP as reported on social media has been around Rs. 75.
• Hem secuities is the Lead Manager to the issue. The IPOs lead managed by them have given a good return to the investors. These include names like E Factor Experiences Limited, Arabian Petroleum Limited, ,Saakshi Medtech and Panels Limited, Kahan Packaging Limited, Asarfi Hospital Limited, Kaka Industries, Green Chef, Vasa Denticity, Chaman Mettalics, Hemant Surgicals, Labelkraft, Concord Control Systems Limited, Earthstahl & Alloys Limited, Silicon Rental Solutions Limited, Krishna Defence and Allied Industries, Prevest Denpro Limited etc
• SME IPO are quite illiquid and volatile and exit options sometimes is delayed. Present downturn in market and midcaps poses significant risk to SME market.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.